Hasbro 2014 Annual Report Download - page 86

HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
(6) Program Production Costs
Program production costs are included in other assets and consist of the following at December 28, 2014
and December 29, 2013:
2014 2013
Released, less amortization ........................................... $41,742 59,783
In production ...................................................... 24,607 17,683
Pre-production ..................................................... 1,841 2,499
Total program production costs ....................................... $68,190 79,965
Based on management’s total revenue estimates at December 28, 2014, substantially all of the unamortized
television programming costs relating to released productions are expected to be amortized during the next three
years. Based on current estimates, the Company expects to amortize approximately $26,000 of the $41,742 of
released programs during fiscal 2015.
(7) Financing Arrangements
At December 28, 2014, Hasbro had available an unsecured committed line and unsecured uncommitted lines
of credit from various banks approximating $700,000 and $108,000, respectively. All of the short-term
borrowings outstanding at the end of 2014 and 2013 represent borrowings made under, or supported by, these
lines of credit. Borrowings under the lines of credit were made by certain international affiliates of the Company
on terms and at interest rates generally extended to companies of comparable creditworthiness in those markets.
The weighted average interest rates of the outstanding borrowings under the uncommitted lines of credit as of
December 28, 2014 and December 29, 2013 were 3.80% and 5.25%, respectively. The Company had no
borrowings outstanding under its committed line of credit at December 28, 2014. During 2014, Hasbro’s working
capital needs were fulfilled by cash generated from operations, borrowings under lines of credit and utilization of
its commercial paper program discussed below.
The unsecured committed line of credit, as amended on October 2012 (the “Agreement”), provides the
Company with a $700,000 committed borrowing facility through October 1, 2017. The Agreement contains
certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical
of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. The
Company was in compliance with all covenants as of and for the year ended December 28, 2014.
The Company pays a commitment fee (0.15% as of December 28, 2014) based on the unused portion of the
facility and interest equal to a Base Rate or Eurocurrency Rate plus a spread on borrowings under the facility.
The Base Rate is determined based on either the Federal Funds Rate plus a spread, Prime Rate or Eurocurrency
Rate plus a spread. The commitment fee and the amount of the spread to the Base Rate or Eurocurrency Rate
both vary based on the Company’s long-term debt ratings and the Company’s leverage. At December 28, 2014,
the interest rate under the facility was equal to Eurocurrency Rate plus 1.25%.
The Company has an agreement with a group of banks to establish a commercial paper program (the
“Program”). Under the Program, at the Company’s request the banks may either purchase from the Company, or
arrange for the sale by the Company of, unsecured commercial paper notes. Borrowings under the Program are
supported by the aforementioned unsecured committed line of credit and the Company may issue notes from time
to time up to an aggregate principal amount outstanding at any given time of $700,000. The maturities of the
notes may vary but may not exceed 397 days. Subject to market conditions, the notes will be sold under
customary terms in the commercial paper market and will be issued at a discount to par, or alternatively, will be
sold at par and will bear varying interest rates based on a fixed or floating rate basis. The interest rates will vary
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